(Bloomberg) -- One of the world’s biggest bond investors is limiting its exposure to Pemex debt out of concern that government support for the state driller will dry up once Mexico’s oil-friendly president is out of office.
Pacific Investment Management Co., which oversees about $1.8 trillion of assets, is underweight on the company’s bonds and “keeping exposures relatively short-dated,” according to Pramol Dhawan, the firm’s head of emerging-market debt.
In an interview Wednesday, Dhawan called the bonds “over-owned” and said the market should be prepared for Mexico to reduce its support for Petroleos Mexicanos SA after President Andres Manuel Lopez Obrador leaves office next year.
“This administration was perhaps the most pro-Pemex administration you would likely be able to get,” he said. Subsequent governments “may not be as friendly toward the credit.”
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